Download This PaperAnother Example of a Credit System that Coexists with Money
26 Pages Posted: 23 Dec 2014
Date Written: December 22, 2014
Abstract
We study an economy in which exchange occurs pairwise, there is no commitment, and anonymous agents choose between random monetary trade or deterministic credit trade. To accomplish the latter, agents can exploit a costly technology that allows limited record-keeping and enforcement. An equilibrium with money and credit is shown to exist if the cost of using the technology is sufficiently small. Anonymity, record-keeping, and enforcement limitations also permit some incidence of default, in equilibrium.
Keywords: credit, default, money, search
JEL Classification: E40, E50, E51, G20
Suggested Citation: Suggested Citation
Camera, Gabriele and Li, Yiting, Another Example of a Credit System that Coexists with Money (December 22, 2014). Available at SSRN: https://ssrn.com/abstract=2541953 or http://dx.doi.org/10.2139/ssrn.2541953
Do you have negative results from your research you’d like to share?
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.